Fed Handed Out $7.7 TRILLION to Banks From 1985-2009

by Ben Hoffman

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.

A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

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If you aren’t outraged by this, you’re probably a Republican.

2 Comments to “Fed Handed Out $7.7 TRILLION to Banks From 1985-2009”

  1. Actually one of the TEA Parties primary demands was that Congress audit the Fed for precisely this reason. Most hard-core Republican’s I know argue investment banks like Goldman Sacs should have been allowed to fail in 2008.

    • Yep, most Republicans don’t understand cause and effect. Allowing those huge banks to fail would have been catastrophic for our country. Most economists agree that it would have sent us into another depression. The problem with your silly free market policies is, banks are allowed to get so big that their collapse would bring down the entire economy. It’s only emotion that causes people to support the free market utopia that has never worked and will never work.

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